NI7 Environment for a Thriving Third Sector – still achievable in Suffolk or will this target now wither in the expected forthcoming public sector funding cuts?
National Indicator 7 is one of 198 National Indicator targets (now reduced to 188) that were nationally developed to judge the performance of local government for the next three years, within the performance framework delivered through Local Area Agreements (LAAs) and audited through Comprehensive Area Assessments (CAAs).A briefing note from the Cabinet Office (2008: 3) states, ‘these indicators cover all the national priority outcomes which local authorities will be responsible for delivering, either on their own or in partnership with others’.The term ‘partnership’ is key to the effectiveness and delivery of Local Area Agreements, set up to pool funding and resources of public, private and third sectors to meet the needs of the local community, but now perhaps burdened by the red tape of more bureaucracy from central government in the imposition of centrally set targets.Johnson and Osborn (2003: 152) agree with this point in relation to the success of Local Strategic Partnerships (LSPs) which they feel, ‘in practice …depend …on the extent to which local priorities accord with nationally-driven ones. These targets may encourage greater service co-ordination, therefore, but at the cost of inhibiting local co-governance.’
The development of the National Indicator set is an example of what Rhodes (2007: 1253) accepts as a, ‘persistent asymmetry between a constitutional superior (central government) and a constitutional subordinate (local government), because the centre can unilaterally change the rules of the game.’While all of the 188 targets are to be worked towards and measured against, each LAA has prioritised up to 35 targets against which funding is attached for successful outcomes (of which a certain number are mandatory and the rest negotiated depending on local priorities and need).In terms of choosing NI7 as a priority target, however, only 61 Local Area Agreements out of 150 have done so within England (Third Sector Online 2008).Suffolk, for example, decided that other targets were more important or had stronger lobbying for them within the negotiation process.While all the targets are measured against, priority ones tend to receive local funding and resources to aid their achievement, as these come with a monetary reward if delivered successfully.Marks (2007: 143), in discussing the issues around Local Strategic Partnerships, makes a comparative point in that achievement of such targets are difficult with, ‘the demands of tight timetables and of national priorities for the public sector against the time-consuming nature of local participation and the importance of local priorities’.
NI7: ‘Environment for a thriving third sector’ is the only target that directly impacts on the development of the third sector as a whole, although there are others that touch on areas of importance such as NI6 (volunteering), civic engagement and empowerment in decision making (NI3-4).By the fact it has been included in the set highlights the importance that the government gives to the third sector in its role in supporting and developing community cohesion, empowerment and engagement and the Sector’s value as a partner in service delivery.NI7 is seen as extremely important by the third sector as it measures the, ‘contribution that local government and its partners make to the environment in which independent third sector organisations can operate successfully’ (Cabinet Office, 2008: 4). The Cabinet Office’s briefing on NI7 (2008: 4), also goes on to state that, ‘local statutory agencies can… be influential in shaping the environment in which third sector organisations work… through, for example, their approaches to partnership working, consultation, funding relationships, or in the ways they commission and procure services.’Indeed, this is a key point, in that, ‘NI7 is about how the public sector creates an environment for the third sector to survive – not a measure of how the third sector is performing (or even, whether or not it is thriving) (One East Midlands, 2009:13).The achievement of NI7 is therefore measured through the perception of third sector organisations as to the supportiveness of public sector agencies locally, with a stretch target given for LAAs to work towards.
In terms of setting a baseline Ipsos Mori, on behalf of the Office of the Third Sector,carried out the initial survey for NI7, sending out questionnaires to 104,391 third sector organisations and receiving back a 47% response rate.The OST (2009) resultsreflect that, ‘at the national level 58% of those organisations declaring ‘a great amount’ of direct dealings with local statutory bodies find that they have a positive or very positive influence on their success, compared to overall average of 16.2 % across all third sector organisations.’Suffolkcame out with a slightly higher than national average baseline of 16.6 % and must work towards increasing that by 3.7% to 20.3% by An article on the findings by the Community Sector Coalition (2009)stresses that, ‘greater influence on local decisions and more direct contact with local statutory bodies (are) key drivers in how the sector perceive local statutory bodies ability to influence their success.’In terms of influence, the third sector thus feel more empowered if they have involvement in what Larson (1992, cited in Rhodes 1996: 659) calls a network form of governance which, ‘highlights reputation, trust, reciprocity and mutual independence’.If this is the case, how then, will the effects of the current political and economic crisis impact on the perceived relationship between the third sector and local public sector agencies?
Angela Smith MP, Minister for the Third Sector, speaking at NAVCA's Annual Conference in September 2009 empathised the need to embed the third sector into local decision making and praised the impact that NI6 and NI7 was having on improving the relationship between Sectors, though admitted that there is room for improvement.She touched lightly on the fact that the current recession does provide additional challenges and difficulties, but felt that those challenges can be met together with additional support from government.
The need for third sector services within the recession was highlighted by Hilary Blears MP, speaking at an AVECO conference 2008.
One such example of this need in Suffolk is of the Ipswich & Suffolk Credit Union (ISCU), granted an additional £90,000 for two years to counter the impact of the recession on local residents, who might otherwise turn to loan-sharks or other types of credit.This funding is a mixture of loan capital and revenue, which has allowed the organisation to employ another worker to manage a workload that tripled between 2008 and 2009.They have seen their rural membership increase rapidly and have been able to take on additional premises to provide outreach services.ISCU have highlighted concerns that this funding, although welcomed, is short-term (championed by the county council leader to address an immediate issue) and they need to plan for long-term sustainability at a time when other funding pots are shrinking (Hack 2009).
This is a key point, in that relationships between Sectors may be difficult to sustain in a climate of shrinking public sector funding and service cuts, given that a perception of an environment for a thriving third sector will be dented by funding cuts, however they are managed.Although equality is strived for, the two Sectors essentially have a relationship as funder and fundee.The National Indicator targets have been implemented within the depths of the current economic crisis and their final period of delivery will be at a time in what is projected to be significant cuts to public sector funding.A report by One East Midlands (2009: 12) offering a regional response to NI7 speculates as to the future impact of the economic downturn on the third sector, accentuating concerns that, ‘funding pressures on the statutory sector will lead to savings at the expense of third sector organisations’. The report highlighted that the third sector were seeing an increased demand for their services but less funding was available to deliver them.These concerns around funding ranged from cuts to grants to a trend towards large single contracts that are cheaper to tender for and manage, but are detrimental towards smaller organisations that could not compete for them.
Politically, this is an area being spotlighted by government parties as part of their manifesto for the third sector.Kevin Curley, CEO of NAVCA, reflected to in his opening speech to the Local Government Chronicle Conference in 2008 that, ‘the new permanent place for the third sector at the heart of public policy making and public services delivery is well illustrated by publication… of the Conservatives’ Green Paper Voluntary Action in the 21st Century. This brings a welcome emphasis on grant funding rather than contracts’.It could be argued that whilst grants have their place, is it not easier to make funding cuts to grants pots than contracts, all be it within Compact guidelines? Dependency on grants could be seen as perpetuating the funder, fundee relationship, rather than focusing on shared service design.This is a point discussed by Ross and Osborne (1999: 56) who speak about the paternal relationship in which local authorities allocate grants through a hierarchical planning system and while the third sector is well thought of, it has little or no voice in shaping local policy.They reflect that the community governance relationship is the one to be strived for, in which the third sector plays a key role in democratic development and participation.Gutch (1990, cited in Ross and Osborne 1999: 52) agrees that the move away from a market-based model, within which the public sector maintains control of the policy making process and the third sector is restricted to service agent can only be beneficial and whichever funding route is focuses upon, it is clear that the involvement of the Sector in service design, as well as delivery is imperative.
These issues were recently debated in a focus group consisting of public and third sector personnel to look at the situation within Suffolk (SAVO 2009).While there were a range of concerns highlighted, including the shift towards contracts, it was agreed that creating an environment for a thriving third sector should be a joint responsibility of both the public and third sector.It was felt that the third sector should work to pro-actively develop its own capacity and be able to prove its worth, especially in the current economic climate and particularly around spend from the public purse.Potential impacts on a third sector vulnerable due to its basic characteristics, ‘notably its dependence on voluntary and philanthropic support from individuals and on statutory sources of income’ (Vaitilingam 2009: 34), predict a steep decline in funding from donations, grants and contracts.
Interestingly, it was felt in Suffolk that the affects of the recession had generally not yet been felt by third sector organisations in any significance, indeed some had experienced more funding this year, though the organisations represented at the focus group were those that received a large proportion of their funding from the public sector, rather than those that rely on public donations. A recent report into the effect of recession on the third sector in Suffolk reported that 56% of respondees actually felt positive about the future (WCF, 2009). Indeed, Suffolk’s third sector is expected to experience a ‘recession lag’, with the full effect taking place within 2010/11 after a general election and with the expected efficiency savings needed to be made by the local public sector projected to be 20-40% over the short term, to begin to pay back the national debt (Hack 2009).
The potential immediate causalities were seen as the medium sized organisations (those with annual income of £40,000-£700,000 a year), who relied mainly on public sector funding and would therefore be vulnerable if they did not plan for the future, have robust performance management in place to show their impact, develop a wider funding base and embrace change to become more resilient. Daniela Barone Soares, Chief Executive of Impetus Trust (speaking at a Futurebuilders event in 2009), warns however, that there is a fine balance and third sector organisations must avoid changing their mission to suit funders in their strive for sustainability and resilience.
Mohan and Wilding (2009) point out that actually, ‘stagnating or declining income sources can have some positive effects’ particularly around looking to diversify incomes.One such example in Suffolk of a medium sized organisation looking to become more sustainable while retaining their mission and ethos is of Waveney Community Forum, an infrastructure organisation with their core currently sustained by a three year BASIS grant from the Lottery.This funding comes to an end in 2010 and they have spent the last two years exploring other avenues for income generation.They have recently purchased a failing community building (the Kirkley Centre) in Lowestoft for £1,000 from the local council and with Capacitybuilders capital funding for the renovations and refurbishment, are looking to provide a facility for both the community and the third sector locally, working with other partners such as Lowestoft College.Income will be generated from desk space, back room services, meeting room hire, a community café and through partnership projects, such as hosting a LEAP centre and ICT suite.
Perhaps a radical viewpoint is that the third sector organisations that will fail in the current economic climate are ones that were weak or struggling, propped up by historic relationships with public sector funding, rather than based on need or quality service provision?The need to account for the impact of funding is a viewpoint picked up by Pete Alcock, speaking at a Charities Evaluation Service seminar (2009)on why third sector quality matters to policy makers.
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Alcock notes that the public sector is shifting their policy focus to developing different relationships with the third sector, concentrating not only on what they do, but how they operate and ‘performance manage’ themselves.Indeed, NI7 is itself a measurement of current investment programmes, such as Futurebuilders, Capacitybuilders and the development of the Compact.He accentuates that there are now clear expectations from local government that organisations seeking support are required to demonstrate quality services for public funding spend.This must continue into the future and is particularly important at the current time; as Mohan and Wilding (2009) stress that, ‘given the pressure on policymakers to do (or seen to be doing) something, there is a significant risk that current policy, and therefore the allocation of scarce resources, will be based upon poor quality evidence.’
In conclusion, the achievement of NI7 will be a challenge not only in Suffolk but throughout England.It is unlikely that the target to raise perceptions of an ‘environment for a thriving third sector’ to 20.3% will be achieved within a time of funding cuts, but the process of engagement, communication and partnership working created by the ethos of this indicator can only be a good thing.The public sector are sending out clear warnings as to the efficiency savings that they must make and it is in the interests of the third sector to heed these warnings and prepare themselves, accepting that there will be casualties.Both Sectors agree that the third sector is well positioned to deliver necessary services to the public, particularly at the current time.The key will be, as Mohan and Wilding (2009) state, ‘a structured programme of support for the Sector, to ensure that the Sector is well placed to respond to the challenges of the downturn… not least because…it is also arguable that we have created a situation where they cannot be allowed to fail.’
Laura Hack November 2009
References:
Cabinet Office (2008) Briefing Note for Local Strategic Partnerships NI7 ‘Environment for a Thriving Third Sector’ [online]
Gutch, R (1990) Partners or Agents, NCVO, London. cited in Ross, K. and Osborne, S. P. (1999) Making a Reality of Community Governance: Structuring government-voluntary sector relations at the local level, Public Policy and Administration, 14:49
Hack, L (2009) Working Together on Recession Solutions inSuffolk – presentation delivered to Annual Compact Conference, Birmingham [online]
Johnson, C. and Osborne, S.P. (2003) Local Strategic Partnerships, Neighbourhood Renewal and the Limits of Co-Governance, Public Money and Management, July 2003:147
Larson, A. (1992). Network dyads in entrepreneurial settings: A study of the governance of exchange relationships. Administrative Science Quarterly, 37: 76-104 cited in Rhodes, R.A. W. (1996) The New Governance: Governing without Government, Political Studies, XLIV: 652-667
Marks, L. (2007) Fault-lines between policy and practice in local partnerships
Journal of Health Organisation and Management. 21: 2: 136–148
Mohan, J. and Wilding, K. (2009) Economic downturns and the voluntary sector: what can we learn from historical evidence?. London: History and Policy, 85.
Office of the Third Sector (2009) National Survey of Third Sector Organisations [online]
Rhodes, R. A. W. (2007) Understanding Governance: Ten Years On, Organization Studies, 28: 8: 1243-1264
Ross, K. and Osborne, S. P. (1999) Making a Reality of Community Governance: Structuring government-voluntary sector relations at the local level, Public Policy and Administration, 14:49
SAVO (2009) Environment for a Thriving Third Sector Workshop Notes [online]
Representation & Partnerships 
